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Student Loan Questions Related to COVID-19

A lot of information is coming at student loan borrowers regarding their interest and payments. All of this information can be a little confusing to navigate through and decide what is important and what relates to their situation. Below are some common questions related to recent information and developments related to the COVID-19 pandemic and CARES Act.

student loan questionsQ: Do I have to make payments on my student loans?

A: Student loans under the Direct loan program automatically have been put in a status called administrative forbearance. This means that you do not have to make a payment on these loans until Sept. 30, 2020. However, you still are able to make your previously scheduled monthly payments through your lender.

If you have federal student loans under a different program or a private student loan, your loan payments will not be suspended automatically. If you are having trouble making your payments through a different loan program, contact your lender or servicer to see if they have options available to you. For example, if you have a student loan through the Bank of North Dakota, you can contact the bank and ask to defer your payments for six months.


Q: Is the interest on my student loans really 0%?

A: Again, this applies only to federal Direct loans. Interest on these loans will be 0% until Sept. 30, 2020. If you choose to make a payment on these loans, your entire payment will go toward the principle of the loan because interest is 0%. If you are in a situation where you can continue to make payments, now is the best time to make a big impact on the balance.

The Bank of North Dakota has reduced the interest rate on its student loans. The bank reduced interest on variable-interest-rate loans on April 1, 2020, and those with a fixed-interest-rate loan will receive a decrease in their interest rate by at least 1%.


Q: Will the months of nonpayment affect my student loan forgiveness?

A: If you are on an income-driven repayment plan and are planning on your loans being forgiven after a certain number of on-time payments, the months you do not make a payment (April to September 2020) will count as payments, so you will not lose those “months” of payments.

If you qualify for public service loan forgiveness (PSLF), which requires 120 on-time payments, these months of nonpayment will count. For example, if you just completed an employment certification form (ECF) and you were determined to have made 60 payments toward PSLF as of March 2020, and you choose not to make another payment until October 2020, the months of April, May, June, July, August and September will be counted next year when you submit your next ECF.

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